Financial Analysis Report
| American Electric Power Co. | Financial Analysis Report |
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Industry Outlook
The energy industry in its entirety involves the production and sale of energy, fuel extraction, manufacturing, refining and distribution. As our society consumes enormous amounts of fuel, the energy industry becomes more of a necessity to the infrastructure and maintenance of civilization worldwide. Indeed energy use is considered to be one of the most significant factors to the expansion of the human society in almost all countries as it is the aid to the control and adaptation to the environment. Managing the use of energy is definitely unavoidable as development of its resources is crucial to various industries such as agriculture, transportation, communication, and etc.
The increasing demand for utility services, particularly for electricity, is leading to the installation of large generation units. The power generators, in the wake of more stringent environmental regulations and restrictions, are gradually shifting their focus to renewable sources and natural gas to produce power. This is a welcome sign for the industry and a positive step towards reducing the emission of greenhouse gases.
Despite the assured demand for services, the utilities have to constantly meet the high expectations of its wide customer base, adapt to a changing global economic scenario, and upgrade technologies to meet stringent environmental norms.
The majority of new electricity in the next two decades in the U.S. will be generated from natural gas and renewable sources. Besides the abundance of natural gas, as many as 30 U.S. states and the District of Columbia have enforceable renewable portfolio standards or other renewable generation policies. We expect this count to go up, compelling producers to generate more green power to meet the renewable standards fixed by the states.
Since the utilities operate in a regulated environment, they charge a fixed rate for
|
Industry Outlook
The energy industry in its entirety involves the production and sale of energy, fuel extraction, manufacturing, refining and distribution. As our society consumes enormous amounts of fuel, the energy industry becomes more of a necessity to the infrastructure and maintenance of civilization worldwide. Indeed energy use is considered to be one of the most significant factors to the expansion of the human society in almost all countries as it is the aid to the control and adaptation to the environment. Managing the use of energy is definitely unavoidable as development of its resources is crucial to various industries such as agriculture, transportation, communication, and etc.
The increasing demand for utility services, particularly for electricity, is leading to the installation of large generation units. The power generators, in the wake of more stringent environmental regulations and restrictions, are gradually shifting their focus to renewable sources and natural gas to produce power. This is a welcome sign for the industry and a positive step towards reducing the emission of greenhouse gases.
Despite the assured demand for services, the utilities have to constantly meet the high expectations of its wide customer base, adapt to a changing global economic scenario, and upgrade technologies to meet stringent environmental norms.
The majority of new electricity in the next two decades in the U.S. will be generated from natural gas and renewable sources. Besides the abundance of natural gas, as many as 30 U.S. states and the District of Columbia have enforceable renewable portfolio standards or other renewable generation policies. We expect this count to go up, compelling producers to generate more green power to meet the renewable standards fixed by the states.
Since the utilities operate in a regulated environment, they charge a fixed rate for